This means 73% of their Sales Managers achieved their quota last year. This ultimately led to the company achieving 103% of overall quota. Bonuses were paid, President’s Club in Hawaii was well attended and the VP of Sales and his Sales Leadership were fat and happy.
But there was a problem…a serious problem.
97% of the Sales managers made their quota from having one super ‘A’ sales player on their team blow out their goal. In fact, the average quota attainment for the top sales person on each team was 178%.
You think the 80/20 rule applies at your company? In this one, it was the 97/3 rule (97% of the revenue came from 3% of the sales reps). Their golden train is hooked to 19 sales people. Lose one of them, 2012 is over. Loose two, better update your resume.
The company is held hostage by 19 people. The CEO can’t ‘change’ the sales force. Sales Management drops everything and runs when one of these 19 cries. New Products need to be approved by the 19. A change in the comp program needs to be run by them. “Don’t do anything to upset those 19 people” the VP of Sales told me. “Without them, I will no longer have a job’.
How did it get like this?
Is your company in the same place?
What can you do?
4 Ways Sales Management Can Avoid Being Held Hostage by ‘A’ Players:
- Perform a Sales Force Talent Assessment Immediately. Figure out who your ‘B’ and ‘C’ players are. This does not mean measuring only quota attainment. This is assessing talent based on pre-determined competencies established by sales management.
- Invest Time in your ‘B’ Players. 77% of all your time spent should be coaching and developing your people. And focusing on developing your ‘B’ players will ensure they will become ‘A’ players.
- Replace your ‘C’ Players with Rock Star Talent. How? Use a rigid Talent Management Process. Aka: Spend time interviewing well, developing a virtual bench and network. When was the last time a great sales person was hired that was not referred to you?
- Change your Sales Management Comp Plan. Get Quota Parity on your team. Remember, World Class performance indicates 73% of your team should make their quota. Not one or two people but over 7 out of 10. Change the variable pay structure or add a bonus that pays SMs to have over 50 to 70% of their team over their individual quotas. Funny things will happen: The parity will be their next year.
Let the rock star be 200% of quota. It will be awesome because you will be over 125% of your quota if you get the quota parity on your team. This will enable you to not be held hostage by the super ‘A’’s. You won’t have to get their ‘approval’ to change the organization. And you will be able to make the necessary changes in the business to adapt to the every changing buyer.
I was guilty of this poor performance. When I was a VP of Sales, one of my sales teams consistently achieved 210% of quota. That team, based in San Diego, had 4 sales reps and one sales manager. My competitors in San Diego each had teams of over 12 reps. I consistently asked my San Diego sales manager to hire more reps. Data told me the market was under penetrated.
The dialogue with my sales managers went something like this: “Bill, you have 4x the number of prospects per sales rep than anyone else in the company. You are missing new business opportunities because you don’t have enough sales coverage. We are leaving revenue and market/wallet share on the table the competition is getting. Hire some more reps.”
Bill would then say. “But Dan, we are a team. My Reps are performing at a very high level because of the relationships we have. I can’t ‘take’ prospects away from them. In fact, I would like to go to 3 reps. Remember, if I hire someone new, the other guys will quit. Now you don’t want that do you? “
I was held hostage. I needed his revenue. I was an idiot.
Creating and executing on the 4 ways above enabled me to get out of this routine. More of my sales team hit quota. I hit 130% of my quota that year with 80% of my team over 100%. And I got promoted.
Do you have one rainmaker on your team? Being held hostage? You might want to read our new eBook from Matt Sharrers. It will allow for clarity on this issue. Don’t miss it. If you want a copy, click on the link below. Good Job Matty.